Mark Quint Geoscientist Oil and Gas Authority UNITED KINGDOM

1. Mark Quint Geoscientist Oil and Gas Authority UNITED KINGDOM

2. Role of the Oil & Gas Authority in Licensing, Consents and the Regulation of Induced SeismicityHydraulic Fracturing Bakken Safety Tour 2016 mark.quint@oga.gsi.gov.uk

3. Introduction Onshore oil and gas in the United Kingdom Role of the Oil & Gas Authority Licencing Process Consenting for Operations Regulation of Induced Seismicity Hydraulic Fracture Plan Traffic Light System

4. Onshore Oil and Gas in the UK • Crown Ownership • Petroleum (Production) Act 1934 • Over 2,200 wells drilled • Producing fields • 30 Oil fields • 8 Gas fields • 2 Coalbed Methane fields • 2014 Onshore Production • <1% of annual UK production • 5.9 million barrels of oil • 1.6 billion cubic feet of gas

5. The Oil & Gas Authority • We work with government and industry to make sure that the UK gets the maximum benefit from its oil and gas reserves • We’re responsible for regulating oil and gas operations in the UK This includes: • oil and gas licensing • oil and gas exploration and production • oil and gas fields and wells • oil and gas infrastructure • carbon storage licensing • We cover both offshore UKCS and onshore operations in England

6. Responsibilities for the OGA • Licensing process • Operator competence • Seismicity • Shale geology • Prospectivity • Subsidence • Fracture size and propagation • Offshore / onshore comparisons

7. Collaboration between Regulators • Health & Safety Executive • Well integrity • Staff safety • Well design and construction scrutiny • Decommissioning of wells • Environment Agency • Impact on aquifers • Water usage • Disposal of waste water • Soil pollution • Use of chemicals • Site Restoration • Methane emissions • Air quality • Disposal of Naturally Occurring Radioactive Materials • Central Government • Responsible for policy on: • Energy security and Energy Mix • Climate Change • Economic impacts, jobs and skills • Oil and Gas legislation • Oversight of the planning system • Mineral Planning • Authority • Focus on whether a development is an acceptable use of land. • Issues may include: • designated wildlife sites, protected habitats and species • site restoration and aftercare • noise associated with the operation • visual impact and landscape character • archaeological and heritage features • Traffic • Oil and Gas Authority • Licensing process • Operator competence • Seismicity • Shale geology • Prospectivity • Subsidence • Fracture size and propagation • Offshore / onshore comparisons • Public Health England • Impacts on Public Health

8. Regulatory Process in England OGA award of exclusive licence after open competition Local Authority Planning Permission (with public consultation) Environment Agency statutory consultee • OGA online application for well consent • Hydraulic Fracture Plan submitted for a planned frac • OGA checks operator competency, insurances and finances Health & Safety Executive Notification • Environment Agency Notices • Mining waste permits • Abstraction licences • Discharge and radioactive substance permits • Consent

9. Petroleum Exploration & Development Licence • A PEDLgrants exclusive rights “to search and bore for and get petroleum” in all the various stages of oil and gas exploration, appraisal; production and eventually decommissioning of the wells. • PEDL licence covers conventional oil and gas, tight gas, coalbed methane (CBM), mine vent gas, oil shale and shale gas. A PEDL licence does not allow for underground coal gasification (UCG) or CO2 sequestration. • Licences do not give permission for operations, only grant exclusivity to licensees within a defined area. • Drilling, fraccing or production require local planning permission, Access agreement(s) with relevant landowner(s), Environment Agency permits, HSE scrutinyand OGA well consent before any operations can commence

10. 14th Licence Round • 295 blocks were applied for by 71 applicants. • Considered financial viability and capacity • 95 applications • 15 rejected • Interviews held with applicants • Blocks marked against published Scheme • Reduced to 159 blocks after evaluation of: • environmental sensitivity awareness • operator competency • decision not to award licences in Scotland and Wales • Habitats Regulations Assessment (HRA) completed on all the blocks • After Public consultation, 159 blocks were offered in Dec 2015

11. Round Results • Total Work Programme bid: • 57 Drill or Drop wells • 40 Firm vertical wells • 14 Firm hydraulically fractured horizontal wells • Over 2,100 km of 2D • Over 2,000 km2 of 3D • The award of a Petroleum Exploration and Development Licence (PEDLs) do not automatically give permission for operations to begin. • The necessary planning and regulatory consents will be required before any activities can take place.

12. Detailed Consent Process Licence Round Application Permissions & Permits to Drill Well and/or Hydraulically Fracture Well OGA reviews Finances and Competencies Strategic Environmental Assessment Environment Agency Permits Local Planning Authority Landowner Permissions Including… OGA assesses Technical Evaluation and Work Programme Habitats Regulations Assessment Operator Submits Environmental Risk Assessment Public Consultation Statutory Consultees inc. Env. Agency Mining Waste Abstraction Discharge Radioactive Substances OGA awards PEDL Licence HSE well design scrutiny (Optional) WONS: Application for Consent to Suspend Well Operator drills Well WONS: Application for Consent to Drill OGA reviews Finances, Competencies and technical plans for operations “Is the Environment Agency content for the OGA to issue Consent?” “Is the Health & Safety Executive content for the OGA to issue Consent?” OGA checks Planning Permission (Optional) Operator suspends Well OGA issues Consent to Drill Operator meets all planning and permitting conditions Hydraulic Fracture Plan Approval (Seismicity and Monitoring Plan) WONS: Application for Consent to test / complete Well with HVHF “Is the Secretary of State content for the OGA to issue Consent?” “Is the Environment Agency content for the OGA to issue Consent?” “Is the Health & Safety Executive content for the OGA to issue Consent?” OGA reviews Finances, Competencies and technical plans for operations Operator submits draft HFP Operator HSE EA OGA Review with Regulators DECC check S50 conditions Operator hydraulically fractures Well Operator performs Extended Well Test Operator resolves HSE issues Operator resolves OGA issues Operator resolves EA issues Operator provides evidence to meet all 13 Section 50 Conditions OGA issues Consent to Complete Well OGA issues Consent to Test Well OGA issues formal EWT Consent Operator revises HFP Collect and make data available EA: Emissions & groundwater monitoring OGA: Seismicity & Geological Data

13. Regulating induced seismicity:The Hydraulic Fracture Plan (HFP) and Traffic Light System

14. Background – Preese Hall-1 • Preese Hall-1 was the first HVHF test in the United Kingdom • Two small earthquakes were recorded in the Blackpool area in Spring 2011 during frac operations • Tremors measured Magnitude 2.3 and 1.5 on the Richter scale • Moratorium on Hydraulic Fracturing imposed by government until 2012 • Report by the Royal Society recommended the introduction of new regulatory requirements

15. Induced Seismicity – Preese Hall-1 Recorded earthquakes Normal Frac Micro-earthquakes Geomechanical Study of Bowland Shale Seismicity, C.J. de Pater and S Baisch, 2011

16. Richter Earthquake Magnitude Log scale – a whole number increase represents a tenfold increase in seismic energy

17. Historical seismicity in Britain http://www.earthquakes.bgs.ac.uk/earthquakes/UKsignificant/index.html

18. Basis for Traffic Light System From Styles et al 2015, Schatzalp Workshop

19. Hydraulic Fracture Plan: Seismicity & Monitoring Plan

20. Seismic and Monitoring Plan • A depth structure map showing mapped faults near the well and along the well path, with a summary assessment of faulting and formation stresses in the area and the risk that operations could reactivate existing faults. • Information on the local background seismicity and assessment of the risk of induced seismicity. • Summary of the planned operation, including perforation stages, pumping pressures and volumes and predicted extent at each stage. Not to scale

21. Area affected by Hydraulic Fracturing • 4) Proposed method for monitoring fracture height to identify where the fractures are within the target formation and ensure that they are not near the EA permitted boundary credit: AAPG.org

22. Traffic Light Scheme • 5) A description of proposed real-time traffic light scheme for seismicity

23. Summary The OGA is responsible forboth offshore UKCS and onshore operations in England OGA make checks at key consent stages i.e. Drilling, Fraccing, Field Development Regulators work closely together in evaluating applications for hydraulic fracturing